2020 seems like the year that everything has decided to go wrong in the world. But the good news is, we finally made it to the back half. With that, there’s an overwhelming feeling of cautious optimism that it will be a lot better than the first half. Despite COVID-19 cases still being on the rise with no vaccine in sight for the short term, we’re experiencing an increased comfortability amongst people with the “new” way of life. According to the Consumer Boards’ consumer confidence index, we experienced a spike in June, increasing to 98.1 for the month, up from 85.9 in May. This is a positive sign as June was only expected to rise to 91. Confidence + Stability = more consumer spending.
This is encouraging news for brands and the advertising industry, as we continue with 2020. While we are not back to pre-pandemic conditions, and won’t be until there is a vaccine, it’s the right time for brands and marketers to reconnect with consumers. As we look ahead, I foreshadow that the back half of 2020 is going to be more of a hybrid state. One that will fluctuate depending on how COVID-19 continues to impact the US and the rest of the world.
Which brings me to what we need to discuss today – my predictions for the second half of 2020. These fluctuations will continue to challenge us but like all fluctuations, there will be highs and lows. The highs will present many opportunities that hopefully will counterbalance the lows we will face.
Prediction #1: The Auto Industry will Need to Bounce Back
COVID-19 had a quick and severe impact on the automotive industry. Across the globe, there was a disruption in exporting, large scale manufacturing interruptions, and the closure of assembly plants.
Auto marketers will enter H2 2020 with an increased need to make up for the last three months of low sales, as well as move 2020 models to make room for new inventory. We’ll see a spike in attractive incentives, to increase consumer spend and engagement, which will last until the end of the year. There will also be an increased amount of time and spend to reassure consumers that they should feel comfortable purchasing a new vehicle safely. Whether it’s through 1:1 marketing or promotional efforts, auto marketers need to win back the consumer’s trust. In an industry that has is already dealing with a decrease in global demand, the second half of the year will be critical.
Prediction #2: The Holiday Season Will Thrive
According to a new survey from Voxware, 51 percent of respondents expect to begin holiday shopping earlier than normal this year. And with that, 76 percent of respondents intend to purchase more than half of their gifts online.
During the peaks of COVID-19, consumers were less inclined to spend money on nonessential items. But with an increased need to get back to a new normal, consumers will be eager to celebrate and shop for the holidays, albeit a bit earlier than previous years.
For retailers, it’s important to keep in mind the types of categories that flourished during the pandemic and will continue to do so. Examples of this include cookie supplies, self-grooming products, loungewear and home entertainment. As nobody knows how long this new normal will last, consumers will be eager to stop on items that increase their comfort level at home.
Retailers are now is a crucial time to focus on customer engagement. While sales might have been down across the board the past few months, consumers are eager to get back out and about. Consider what your online advertising strategies look like, and who your target audience is. Start these promotions earlier than you typically would, and ensure your manufacturers can account for the increased demand.
Prediction #3: A Surge in Travel
For the U.S, most consumers are still wary to travel, as many states face soaring increases in new COVID-19 cases. As we get closer to the end of the year, the dream of the vaccine will hopefully become more of a reality. But before that, there will be an increased demand for local destinations and getaways. Car rentals, home rentals, and a spike in tourism to local hot spots will have travel marketer’s hands full as consumers crave a world beyond their four walls.
Advertising will play an essential role in determining a consumer’s itinerary. Truly understanding who your target audience is, and where to reach them, will provide a huge advantage once people are ready to book.
Further down the line, once a vaccine is available, we’ll see an immediate surge in travel-related activities. It will take years for the industry to return to how it was before the pandemic, but it’s the little steps of engagement to travelers along the way that will restore some of what has been lost.
Prediction #4: Events Will Continue to Be Digital
Before COVID-19, marketers thrived off events and conferences. The ability to shake hands and connect face-to-face was something we took for granted. But now, with the social distancing guidelines and limited spacial capabilities, virtual events have proven to be the new normal.
For H2 2020, we’ll continue to see a limit on in-person events, due to a reluctance to travel and commitments to social distancing. After months of limited interaction among colleagues, there will be an increased appetite to discuss how others have managed during this time. Expect an increased amount of participation in any type of virtual event, as participants bond over success and failures.
If and when people feel more comfortable congregating in the same venue during in-person events, I expect the virtual component to still stick around. As an industry, we’ve proven that they work. It allows for expanded participation for those folks who would not have been able to make it in person.
H2 2020, Here’s Looking to You
As we stated when 2020 started, and when the pandemic started, no one knows what’s to come from the year ahead. But the good news is there are several signs that the economy is slowly bouncing back and consumers are eager to adjust to a new way of life
Programmatic is and will continue to be, a strong indicator of the health of the advertising market. And looking at where we stand, we’ve already seen those dollars increase. Ad spend will continue to rise, and the industry adjusts.
There will continue to be many challenges advertisers, marketers, and brands will face maintaining profitability during this hybrid time. With those challenges, there will also be many opportunities that sophisticated savvy brands will be able to leverage to survive and even thrive. We need to learn from one another and continue to push for innovations to meet these new market demands.